Mechanism design and the invisible influence of culture and power

From a rather interesting article from mckinsey.com - Leadership and behaviour: Mastering the mechanics of reason and emotion.

Eric Maskin: Mechanism design recognizes the fact that there’s often a tension between what is good for the individual, that is, an individual’s objectives, and what is good for society—society’s objectives. And the point of mechanism design is to modify or create institutions that help bring those conflicting objectives into line, even when critical information about the situation is missing.

An example that I like to use is the problem of cutting a cake. A cake is to be divided between two children, Bob and Alice. Bob and Alice’s objectives are each to get as much cake as possible. But you, as the parent—as “society”—are interested in making sure that the division is fair, that Bob thinks his piece is at least as big as Alice’s, and Alice thinks her piece is at least as big as Bob’s. Is there a mechanism, a procedure, you can use that will result in a fair division, even when you have no information about how the children themselves see the cake?

Well, it turns out that there’s a very simple and well-known mechanism to solve this problem, called the “divide and choose” procedure. You let one of the children, say, Bob, do the cutting, but then allow the other, Alice, to choose which piece she takes for herself. The reason why this works is that it exploits Bob’s objective to get as much cake as possible. When he’s cutting the cake, he will make sure that, from his point of view, the two pieces are exactly equal because he knows that if they’re not, Alice will take the bigger one. The mechanism is an example of how you can reconcile two seemingly conflicting objectives even when you have no idea what the participants themselves consider to be equal pieces.

The bit I quoted above really struck me as either lazy thinking, or unintentional blindness.

It bugs me that Eric Maskin uses children in a room with cake to generalise about human behaviour, without specifying important stuff.

Such as:
Where are the children from?
What are their cultural norms?
What is their relationship to each other?
Will their actions have any repercussions beyond getting less cake?

Happily ignoring all those things, Maskin goes on to apply this concept to management and organisations. Which means that power differentials and politics are also ignored, along with what I previously listed about cultural norms and relationships. It also focuses on an extremely short-term goal.

If the cultural norm is to appear generous...
...then Bob will cut an obviously smaller piece, which lets Alice choose the bigger piece if she wishes to. She may not, she may also wish to appear gracious, and take the smaller piece. But regardless of what happens, it's doubtful to me that the cake would be divided equally.

If Bob has more power - maybe he has the ability to beat Alice up without being scolded for it, even if he doesn't actually want to
...then Bob will whatever he thinks is fair, and count on Alice's fear of him, and understanding of the difference in power, to control which piece she takes. Which means that if Bob cuts an obviously smaller piece, he'll get a nice big piece. And if he cuts an even portion, then he'll get to feel good about himself. And in both cases, Alice's 'choice' isn't really a free choice.

Srsly Nugget? It's just cake!
You could argue that Maskin stated that 'Bob and Alice's objectives are each to get as much cake as possible', but it's pretty obvious that cake is a metaphor for money (or resources).

The fact is, in the real world, choices are rarely so clear and simple. There are always trade-offs. Of course every worker wants to 'get as much cake as possible'. ;) But maybe some workers will take less cake now, if it means a more reliable supply of cake in the future. (I.e. a foreign worker on a temporary visa will likely settle for less 'cake' until they're able to get a permanent visa.)

Humans are complicated. It's never just cake. ;)

Just because it's digitally-mediated doesn't mean it isn't real.

"I was part of the WELL almost from the very beginning. The Whole Earth 'Lectronic Link was founded in the spring of 1985 - before Mark Zuckerberg's first birthday. I joined in August of that first year.

I can't remember how many WELL parties, chili cook-offs, trips to the circus, and other events - somewhat repellingy called "fleshmeets" at the time - I attended. My baby daughter and my 80-year-old mother joined me on many of those occasions. I danced at three weddings of WELLbeings, as we called ourselves, attended four funerals, brought food and companionship to the bedside of a dying WELLbeing on one occasion. WELL people babysat for my daughter, and I watched their children.

Don't tell me that "real communities" can't happen online."

What the WELL's Rise and Fall Tell Us About Online Community

I want to shout this stuff at people who claim that the only true home I've ever had wasn't / isn't 'real'.

Forsaken World: Psychology + Framing + Virtual Economy = PROFIT!!!!!111!!1

So I've written a couple of posts about Forsaken World's economy. Here's where I explain how currency is gated, and how much things are worth in USD, and here's where where I talk about how PWE has elegantly solved the 'gold faucet' problem that's plagued the genre since MU* days. This post has more details on how the core Pay-2-Win stats are tied to the game's economy and currency.

Since I wrote those posts, PWE has made some brilliant adjustments to the entire game economy that I'm willing to bet a month's salary ;) has boosted their profit appreciably, and possibly massively.

It's also led to this being the first time I've seen a virtual economy model the RL problem where the rich get richer, and the poor, poorer.

Best of all, these adjustments are so Machiavellianly (lol word?) brilliant that, instead of causing players to blame PWE for these changes that benefit the few at the cost of the many, PWE has cleverly framed it so that players blame EACH OTHER. Not PWE. Not the instigators and architects of the changes who stand to gain the most.

People were blaming each other, calling each other greedy, having occasional (it's died down a lot now, 6 months later) rages on World Chat about how avaricious other players were. And not a single time, not in a forum post, not in world chat, not in local chat - NOWHERE have I seen anyone point out why and how PWE is at the heart of this change - not mercenary, greedy players who 'overspend' in the CS and then 'lord it over everyone else'. ;)

Such brilliant framing and manipulation of psychology cannot go unsung!

Sing it here, in all its glorious goldenness, I shall!

 

The Back Story
Before PWE 'tweaked' the economy (about 8 months or so ago), people could only convert a maximum of 5 Mercury Statuettes to gold, per day, per character, via a quest - and (iirc) how many times you could do this was also linked to your level.

For purposes of clarity, I will do a direct conversion from gold to USD. This is NOT how PWE does it, PWE gates you through 4 different currencies, and if you're not from the US, you can count that as 5, because you have to think about it in your own currency as well.

This means that people could only gain a maximum of 25g (US$2.50) a day on average per character via direct gold conversion.

This in turn meant that 'whales' would buy Mercury Statuettes in the hundreds from the cash shop, and then vendor them to other players for anywhere from 3g50s to 4g. The reason for this (if you didn't read / don't remember my previous posts) price range is: If you buy a Mercury Statuette from the Cash Shop (US$0.50) and sell it to a specialised in-game NPC, the NPC will give you 3g (US$0.30). If you do daily quests x 5, you'll get anywhere from 4g80s (US$0.48) to 6g (US$0.60) per Statuette+quest.

Whales were thus buying wholesale, then selling to minnows and plankton, because it was the fastest and most profitable way for them to get a lot of gold within a single day.

Of course, this meant that the only people seriously spending in the Cash Shop were the whales.

The minnows (small spenders, say... US$15 a month...) were only spending the bare minimum, and might not even be spending that much a month, because they had no incentive to do so. Because *in general*, unless they were looking for a large chunk of change NOW for a big purchase - say a mount, or a skill scroll - they could slowly build up their cash via Statuettes bought from the whales. Not much reason to purchase anything from PWE, other than impulse.

The plankton (truly free players) were obviously spending nothing! Because if they were willing to sloooowly increase their cash via Mercury Statuettes bought in-game from whales, and playing longer / smarter / etc... they had absolutely no reason to buy from PWE at all. Patience and buying stuff from whales was always cheaper than buying from PWE. And of course, buying from whales costs no RL cash.

 

The Change
PWE studied the situation, doubtless came up with a much more nuanced analysis than I gave above. They then quietly, strategically, and subtly changed one thing - with a ripple effect that I'm pretty freaking sure boosted their profits immensely.

They made it so people can now convert 25 Mercury Statuettes a day, rather than just 5.

 

The Results
Statue prices shot up from 3g50s to 4g75s minimum. 4g60s you can get... if you find a special whale to do a special deal with.

This was met with an initial massive outcry from the plankton and some minnows... not against PWE, but against the whales. GREEDY WHALES! OMG U PPL! SO GREDY. NO1 WILL BUY UR STATS! OMG! etc etc blah blah. This particular noisy state of affairs lasted for at least 2 months, but now, 10 months later, it's a non-issue.

4g75s. Suck it up, or buy your own from the cash shop.

And not once, not anywhere, in-game or out of it, did I see players blaming PWE, instead of each other, for the price increases. Simply brilliant.

 

But Wai Nuggeet, Wai Brilliant?
Because in one fell swoop, PWE:

Made whales happier by giving them a way to get more personal profit when buying from PWE, thereby giving them even more incentives to buy directly from PWE.

Converted some plankton to minnows.
You see, with this change, and the corresponding hike in prices, it's no longer viable to try to get your cash via Statuette quests if you're a plankton. Minnows with a nice little nest egg (which I was), and whales (should they choose to buy from other whales) weren't all that hard hit by the change.

In truth, both whales and minnows benefited - the changes made it possible for them to trade in bulk. So if you had enough gold on hand (minimum 1Diamond - US$10), you could invest, buy at least 25 statues a day, and either not be affected by the price hikes, or else, get even more back - since more statues can be converted.

If not - then as plankton, you'd be best served by *buying* US$10 worth of statues from PWE as your starting capital. And, you know, it's almost never 'just a this time' after you make that first purchase.

Made sure being a plankton was a lot less attractive, and a minnow a lot more so.
No capital to make the initial purchase, and can only buy one or two Statuettes at a time? Tough luck, suck it up, peasant. ;) Watch 'everyone' getting richer while you get poorer.

Acquired a lot more paying customers, and changed their economy to encourage paying customers from the ground up - without alienating their existing customers, whether plankton, minnows, or whales. There was no community perception of PWE as the greedy one, and certainly no hostility. Some, in fact, widely viewed this move as doing 'everyone' a favour.

 

Ahhh PWE... if you can't grow up to be good, you may as well grow up to be good at being evil. ;)

 

F2P Pricing Models & Preying on Decision Fatigue - NYT via NorthTemple

“Decision fatigue helps explain why ordinarily sensible people get angry at colleagues and families, splurge on clothes, buy junk food at the supermarket and can’t resist the dealer’s offer to rustproof their new car. No matter how rational and high-minded you try to be, you can’t make decision after decision without paying a biological price. It’s different from ordinary physical fatigue — you’re not consciously aware of being tired — but you’re low on mental energy. The more choices you make throughout the day, the harder each one becomes for your brain, and eventually it looks for shortcuts, usually in either of two very different ways. One shortcut is to become reckless: to act impulsively instead of expending the energy to first think through the consequences. (Sure, tweet that photo! What could go wrong?) The other shortcut is the ultimate energy saver: do nothing. Instead of agonizing over decisions, avoid any choice. Ducking a decision often creates bigger problems in the long run, but for the moment, it eases the mental strain.”

Yes, yes, not all F2P models are evil.

But of those that are (even the amazingly beautiful luscious evil that is PWE's Forsaken World), I suspect a lot of them depend on decision fatigue pushing people to buy impulsively without calculating the costs, whether in-game or in actual cash.

It would also explain why I simply can't understand some of the Auction House prices in Forsaken World - where I've seen people selling stuff for half of what it's worth in actual currency, if you were to convert actual to FW's currency.

...people are tired, impulsive, don't want to do the math (gated through 4 currencies), and they want money NAO. So they buy a high-priced item and undersell it, because they honestly don't know it's worth / are too tired to think through its conversion.

I have personally worked out these numbers for some in-game acquaintances when telling them to buy/sell higher/lower, and they simply don't want to listen. That's too much work! Games should be fun! Let me spend my moneh how I want! Fairynuff.

I don't mean to imply I'm immune to this too. In FW, converting currencies (through all 4 gates) has become second nature for me. But in the other PWE games I've played, decision fatigue from constantly WATCHING myself (can't do this can't do that) contributed hugely to my dropping the titles.

...PWE are like the evil marketing gods the evilmarketingbits of nugget want to grow up to be.

Is it just me, or does this sound like sex?

Okay, okay. Most of my friends would probably say that everything sounds like food, sex, or both to me, but just reaaaaaaaaaaaaad it. XD

I think of play as being characterized by what I call the "Five S's of Play": its Spirit, Symmetry, Synchrony, Sacredness and Soulfulness. The Spirit of play is laid bare for all to see as animals wildly run about, wrestle, and knock one another over. The Symmetry and Synchrony of play is reflected in the harmony of the mutual agreements to trust one another - individuals share intentions to cooperate with one another to prevent play from spilling over into fighting. This trust is Sacred. Finally, there's deepness to play, for animals to become so completely immersed in it that I like to say they are the play. Play is thus a Soulful activity, an expression of the essence of an individual's being.

There's also incredible freedom and creativity in the flow of play. This is easy to see and amazing to watch. I refer to this as the "Six F's of Play": its Flexibility, Freedom, Friendship, Frolic, Fun, and Flow. As they run about, jump on one another, somersault, and bite one another, animals re-create a mind-boggling array of scenarios and social behaviours. It's difficult to believe that when animals are deep into play they can actually keep track of what they are doing, but they can. It's possible that animals are "practicing" and "rehearsing" important behaviours that will help them to survive. As animals play, it's not unusual to see known mating behaviours intermixed in highly variable kaleidoscopic sequences along with actions that are used during fighting, looking for prey, and avoiding becoming someone else's dinner.

The Emotional Lives of Animals
Marc Bekoff

I don't think it's just me. LIES! ALL LIES!

Priming, Consistency, Cheating, and Being a Jerk at The Psychology of Video Games; My Basis for Social Experimentation with WoW's LFD Tool

Bargh, Chen, and Burrows also did another experiment where some people unscrambled sentences with words related to rudeness (bold, bother, brazen) and some worked with words indicating politeness (patiently, courteous, unobtrusively). All subjects then walked in on a staged scene where they had to interrupt a conversation to get some needed information. Those in the “polite” condition waited 9.3 minutes on average. Those in the “rude” condition jumped in after just 5.5 minutes on average.3

These are examples of what psychologists called “priming,” which is basically getting people in a particular state of mind or getting them to think about what you want them to. It’s a staple of advertising and surprisingly easy to do. I’ve been thinking for a while that game developers should take better advantage of it.

What if, for example, certain words of phrases were thrown around on loading screens between levels or in the matchmaking lobby for a multiplayer shooter? Would simply showing words like “sportsmanship” or “communication” or “fairness” prime people to behave themselves during games? If you didn’t want to be that transparent, you could include little stories, vignettes, or even comics or movies that included those words or illustrations of them. Or maybe you could use real data, like the number of heals provided by players in the previous game or awards for best defense.

This makes me wonder...

...I think I shall now try greeting every crappy LFD group (by now, I despise the dungeon finder) with some happy, perky bounces, and see if that works with priming the groups to act more decently in general, thereby improving my LFD grouping experiences.

I do usually try to greet people with at least a, 'Hullo!' However, for the purposes of this experiment, I think I'll try to be a little bit odder, and work in 'polite' words for killing everything in sight, and see if that works better.

E.g.: Woohoo! Hi guys! Lettuce go forth and politely divest all the mobbies of their tasty loot with civility and gentleness!

(Assuming they have a certain level of mastery of the English language, it should at least be 'ha, this person is odd' even if it's not actually amusing - and it will hopefully, prime everyone with polite words.)

Certainly, when I made mistakes when I started tanking again (even though only low level) for the first time in 2 years, and I explained exactly that, the group was a lot more forgiving than it would have been had I said nothing.

Pair that with how apology has the tendency (if perceived as sincere) to cancel out the effects of annoyance...

...I shall run my little social experiment and report back inna bit!

More observations:
This is the line I've been using. I've had to macro it, because groups are so gogogogogo these days I don't have TIME to type it... and I type really fast.
/p Hi guys! The PUG runs I've had from LFD lately have been great. Good, polite folk - let's hope this is one of them too.

Unfortunately, I can only do this once per run. This is a problem because of folks dropping out / being kicked, etc, and it would be suspicious to keep saying it every time someone new shows up.

Only have one sample so far, so can't really comment - off to get more!

Samples (I may split this off eventually or this will get awfully long)
With Priming
1) RFK - good
2) RFK - good
3) DM - good

4) ZF - good
5) BRD - neutral
6) BRD - bizarre. group was really good. tank was really bad. pally who would not consecrate 'it takes too much mana', could not hold aggro, and ninja'd a haste cloak from me because 'it has stamina' XD
7) BRD - neutral - tank dropped group when Angerforge didn't drop her item
8) ST - bad
9) BRD - bad, tank pulled whole bar way over thaar, while we were smashing barrels. then had a hissy fit. also, another pally tank who wouldn't ever ever EVER consecrate. Not even when I was tanking all the adds (healer).
10) BRD - good - great tank, great group, some loldeaths in the bar, but really nice in general
11) Ramparts - good
12) Slave Pens - good
13) Blood Furnace - good (all three by same group - so could be skewed here)

Without Priming
1) DM - N/A incompetank, didn't have time to hit the macro, didn't stay past the first 2 pulls. Yes, that bad. 
2) ST - Good
3) BRD - bizarre. So many wipes. But people were good natured. Accidentally pulling Drakkisath cause tank didn't SEE him... is classic. XD
4) Ramparts - Good... but - idiot WotLK babies for DPS. Tank was the best I've had in 60 levels, and she was only 59. Extremely tough, amazing aggro (idiots pulled boss, no problems), and she was marking kill target as it came up. Professional. And they were making fun of her for it.
5) BF - Good
6) BF - Bad/bizarre - incredibly INCREDIBLY squishy DK tank. Like healing a mage. He needed shield AND renew at all times, and penance always on CD, with flash heal spamming as well. Couldn't hold aggro so good - I kept being silenced because he wasn't holding the attention of the silencing mobs. And to top it all off, he was wearing a skirt. A skirt. Blizzard doesn't put tanks in skirts, that I remember, unless it's druid leather... So glad I got gear upgrades and talents. -_-
7) UB - Neutral
8) AC - Good

...going to have to stop this for now. the BC section, and I'm told WotLK section is so faceroll that I never run out of mana no matter how stupid the group is being. Makes it very hard to judge.

Australian Certified NGU Beef, and the Human (or Nuggetty) Need for Order

As I was vegetating on the train yesterday, my nuggetty eyes (not that nuggets have eyes, you understand), wandered over to a scrumptulescent Burger King poster for some new burger or the other, touting the juicy (but inferior to nuggetty!) goodness of its beef patties.

Made from, so I read from the little seal of approval, 'Certified Australian NGU Beef'.

What on earth, I thought to myself, is NGU Beef?

After a few moments of intense ponderation, I came up with the following, 'Naturally Grainfed Ungulate'. However, this, while certainly plausible and accurate, had a bit of a marketing problem in terms of seals of approval. After all, how many people would even know that cows are ungulates?

That's when I noticed the 'A' at the start and the 'S' at the end.

-_-

'Certified Australian ANGUS Beef'.

Well, that kinda explained things.

It does say a lot about the human need for order, and the tendency to impose patterns/see patterns where there are none, though. XD